Who Shouldn't Buy A Fixed Indexed Annuity

Episode 117 December 14, 2023 00:15:15
Who Shouldn't Buy A Fixed Indexed Annuity
Annuity Straight Talk
Who Shouldn't Buy A Fixed Indexed Annuity

Dec 14 2023 | 00:15:15


Show Notes

Welcome to the Annuity Straight Talk podcast, episode 117, hosted by Bryan Anderson. This episode takes a no-nonsense look at who might not benefit from fixed indexed annuities. Bryan's focus is on providing you with the straightforward facts, helping you make informed decisions about your retirement planning without any sugarcoating.

In this episode, Bryan discusses various scenarios where a fixed indexed annuity might not be the best fit. He emphasizes the importance of understanding your own financial goals and circumstances, reminding listeners that it's okay to choose a path different from his recommendations. The episode covers a range of topics, from market volatility and short-term goals to age considerations and personal comfort with financial advisors.

Bryan also invites listeners to reach out directly for a personalized discussion about their specific financial situations. This episode is a must-listen for anyone looking for honest, clear advice in navigating the complex world of retirement planning.

Key Takeaways:

Remember, Bryan's top priority is to ensure you're equipped with the knowledge you need to make the best decisions for your retirement, without any pushy sales tactics. Tune in to get the real story on fixed indexed annuities and how they fit into the broader retirement planning landscape.

View Full Transcript

Episode Transcript

[00:00:05] Speaker A: This is annuity straight talk. Since 2008, your host Brian Anderson has helped clients nationwide navigate the complex market for annuities. With Brian's assistance, hundreds of clients have achieved a profitable and secure retirement. You I would know because Brian has answered many of my questions concerning annuities and retirement planning so that you can benefit as well. Let's get started. Here's Brian. [00:00:46] Speaker B: Hello and welcome everyone to the Annuity Straight Talk podcast, episode number 117. My name is Brian Anderson. We're in the middle of December right now. [00:00:56] Speaker A: Your host. [00:00:57] Speaker B: It's been a good year with a lot of good topics. I'm going to recap next week nationwide navigate episode 117 just kind of annuity, trying to give reassurance to some people who decide not to do whatever I think is best and secure because you got to go with what you think is best and this is an unbiased resource. You can do the research you need and come to the right conclusions for and retirement benefit of your retirement plan. [00:01:19] Speaker A: So that you can benefit. [00:01:21] Speaker B: I encourage everyone to like subscribe or comment on any of your favorite podcast platforms or on YouTube. Share it with your friends, get the word out there. I do a lot of work for this. A lot of people appreciate it. I want to make sure that everybody knows it's okay. If you want to help me out too. Most of the people who listen to this will never do business with me. I don't make a penny off of it. Cost me a fair bit to get it out there. Clearly there's a positive return on that or I wouldn't keep doing it. But this is kind of one for everybody who decides not to go. So episode 117 who shouldn't buy a fixed indexed annuity? A lot of information is about buying annuities in general as well, not just fixed index, but we're going to talk about all of it right now. If you want to talk to me about it and go over any of these specific situations, concerns, or any of these reasons for you individually, hit the top right corner of any page on annuitystraighttalk.com. Schedule a call, put in your name, phone number, pick your time zone, a few notes about what you want to talk about, and I'll give you a call. We'll get after it. No big deal. An annuity is not going to stick to you just because you talked to me. So who shouldn't buy a fixed indexed annuity? I think they're great products. I think they work really well. There's a lot of different options. That's why one thing we do is we look at all the different ways you can accomplish your goals, fixed indexed annuities being one of them. But perhaps based on your circumstances, one of the other options look better. So I would say maybe you shouldn't. There are a lot of people out there that will, and I've met other guys I respect that do a really good job. Oh, mygas Spias income annuities, those things, I don't sell them. I just sell index annuities. In the long run, I think they're all going to be about the same from year to year. It's a little bit of a difference, but there's a lot of people out there that won't show you anything else. I'm going to show you all of it, and I'm going to include a bunch of reasons why you shouldn't buy one, just to make sure that you know you're doing the best thing you possibly can. So two of the things that index annuities do best are protecting assets and generating income. Depending on your situation, there might be a better option. You might get a higher payout somewhere else. You might get more of a guaranteed growth. But I've got a table of contents here. Anybody who's watching the video can see this. If you're not watching the video and you want to read through it, go to annuitiestraighttalk.com search who shouldn't buy a fixed index annuity and it'll take you to the page. You can read through it. Pick the reason that maybe most resonates with you. Table of contents shows all the different reasons why you wouldn't buy one. And I'm going to get right into it. Number one being if the fixed rate annuity, everybody's starting to know them as Myga's multi year guaranteed annuities. If the fixed rate is just fine, then don't buy an index annuity. You say, hey, I like the 5%. I'm not quoting current rates, but you look at the top fixed rate several episodes back. Evaluating fixed annuities, migas, choosing the best one based on your parameters. You like that rate? Hey, I'd love to sit back and make sure I just always get that rate. That's fine. You either get somebody that's selling you a mega only or somebody that's selling you an index annuity only. You've got to compare the two in order to make the right decision. You get somebody that's no, just buy the Mica. Just buy the Mica for all these reasons. Well, maybe you should make the decision. That's why there's a whole lot more education available here than anywhere else. But if you like that fixed rate, take it, go. Until you understand the difference between the products, how they meet your needs, and how they give you the potential that you want, then you should probably hold off of buying a fixed indexed annuity. Don't buy anything until you understand all the different ways you can do it. I've heard from a lot of people. Next example. Market volatility does not bother you. A lot of these people say, well, index annuity, all great, but the growth is limited. I want everything the market can give me, which means you have to accept the risk. So yield potential and then index annuity. Even if you have a protected downside, a lot of that doesn't meet expectations for some people, they're willing to take the risk. So some people will say, the downturns in the market, oh, it'll always come back and keep growing. And it's just a period of time. And I'm patient. I'll wait. And we can talk about how protecting the downside, even with the limited upside, is probably better in the long run if you're in really volatile markets. But some people just zero and eight. No, I just want the top of the market. I'm willing to take the downside, too. I don't care if this is you and you don't mind market risk, you should not buy a fixed index annuity. Next one. Short term goals don't work with the surrender schedule. Now, protecting your assets from market volatility is valuable for any financial portfolio, no matter what type of goals you have. It leads to enhanced performance over time, right? The guaranteed income, all that stuff. Even if it's a really short term annuity, like three or four or five years, putting those in place are meant to solve long term problems, diversify your portfolio, or distribute assets over time, whether it's required minimum distributions. If you want charitable giving, whittling down your estate to pass money to your heirs before you pass away, guaranteed life, all that stuff. Or if you have plans for a major purchase, if any of those things, something that requires short term planning. This goes back to why I didn't sell my dad in an annuity. He had a big purchase he was waiting on, ended up being just a couple of years away. But if that surrender schedule could potentially hold you past one of your short term goals, then you should not buy a fixed index annuity. Here's one. That's my opinion. Next one. If you're past the age of 80, maybe 75, too. I have sold some fixed index annuities. People past the age of 80. Most of the time it was diversification. In several cases they had enough fixed or they had a bunch of other stuff. Hey, let's give this a shot. Maybe it's a little bit different than what I have elsewhere. Let's go for it. And then other times it was kind of longevity planning for guaranteed lifetime income. Maybe a younger spouse. So if you're past the age of 80, typically you're going to be way better off buying an immediate annuity for income or a fixed annuity for just safe accumulation. You want to skip the complexity, enjoy life with your family. Most people over the age of 80 should not buy a fixed index annuity. You're really sharp, you're really with it. You got plenty of diversification. You want to give it a shot, you can. But I'm just saying, on average, just forget about it. Go with the simple stuff. Next one's good. You don't trust salespeople, me included. Some people just look at it and say, I'm just trying to make a buck and, well, I like to make money. You should want me to make money. If I'm successful, I'm still here. I'm still giving you guys advice and information. If I go broke, I stop doing this, I'm not here anymore. But one thing I do a lot of is I really disclose everything and I make sure what I tell people all the time is I'm going to explain as much as I possibly can from the beginning so that there are no surprises, no uncomfortable conversations. Three or four, five years down the road, no matter how much I do that. There are just some people that come into it in a defensive position and they're not going to ever break through that. No matter how much I explain. Large financial transactions are very important and you should never do it. If you start the whole thing with a negative attitude, you're typically not going to overcome that. I learned a lot over the years, and most of it has to do with dealing with people and how to communicate the information. I've seen this situation lots and lots of times. Never ends well. A lot of times, that's what the first phone call is for, is listen, you're never going to get over this. I know you're not because I've seen it dozens and dozens of times. So if you have issues trusting someone who will make money on the transaction, skip it all together. Don't buy a fixed index annuity. Go to a bank and buy a CD. Banks don't make any money off of you, right? That's kind of a sarcastic comment. If you're still waiting for interest rates to rise now, things are a whole lot better than they've been in a long, long time. As far as saving money and getting really good products for retirement, there's still people that say, well, I think they're going to go higher. Realize that you're taking a risk on that as well. From 1990 until 2022, interest rates steadily dropped. So that's a 32 year period. And I think that's a lot of the reason why people, because a lot of you guys have been saving for 30 to 35 years, you've only seen them drop so clearly. It's going to have to go back the other direction. They have in the past year and a half or two. They did briefly in 2018. Waiting for interest rates to rise even further might mean that you have to accept less. What if they go the other direction? Well, you didn't act before. You're probably not going to do it now. Either way, I don't want you to do anything that you don't feel comfortable. If you want to make a call on the rate environment six months, a year, two years from now, fine, you might be right. We'll see. But if you're not satisfied with the yield potential and locking your money up and sticking those rates in place, if you think you can get better, I encourage you to go and do it. If that's the case, you should not buy an index annuity. Simple as that. If you are skeptical, then you shouldn't buy a fixed index annuity. That's essentially what it comes down to. So we got interest rates. Hey, take the fixed rate, make it easy. You don't trust salespeople past the age 80, short term goals, all those things. But this is kind of one of those key components. Like, listen, you're going to have to get past what you thought you knew, learn some new things, and even then, you may not say, oh, I get it, I totally get it. But everything in the financial services business was geared toward accumulating assets. It wasn't until your generation started retire that the mindset is starting to shift a little bit. There's an entire industry created here to benefit retired people. What do you want to worry about? And if you worry about any of those things and you want to stick with them, what you did in stuffing money away, I tell everybody 99% of the reason people are successful is because they save money. Stock market didn't really do them all that many favors. There's a few people out there that had some good hits. Most of those guys took some serious drawdowns too. But those are the reasons why you shouldn't buy a fixed indexed annuity. I don't want to deal with anybody that doesn't want them. You take an academic look at it and you understand the reasons. We work on it over time, try to make the best out of it that we can. But there's lots of other options. There's other ways to create income. There's other ways to protect assets. Annuities are some of the best. Fixed index annuities are just one part of the environment. It's not for everyone. They are good, but maybe you don't like them and that's fine. So mid December, we're looking at two more episodes finish the year. I'm going to wish everybody a Merry Christmas next week. Talk about an annual review. I'm going to have John Ballmer back because everybody liked the episode we did at the beginning of the new year next year. So right before New Year's we're going to have him as well. But this has been episode 117. My name is Brian Anderson. I appreciate you guys joining me this year. It's been a big year. Done a lot of content, produced a lot of good information. Please like subscribe or comment on any of your favorite podcast platforms or on YouTube. You can get a hold of me on the top right corner of any page on annuitystraighttalk.com says schedule a call. Name, phone number, email, time zone, pick a slot, give me some notes, tell me what you want to talk about. We will get after it. I will help you solve your problems. Thank you so much for a great year. Looking forward to a better one next year. Better information, better production. Everything I can do to make it easier for you to enjoy retirement. I'm signing off right now. I'll see you next week previous to Christmas for episode 118. Thank you again. Have a great week. [00:14:18] Speaker A: Okay, you have been listening to annuity straight talk. The proceeding information is for informational and educational purposes only and does not represent tax, legal or investment advice. The views expressed by guests on this program are their own and do not necessarily reflect the views of annuity straight talk or its partners. No information presented today should be acted upon without meeting with a qualified and licensed professional. It is important that you read all insurance contract disclosures carefully before making the purchase decision. Guarantees on the financial strength and claims paying ability of the insurance company.

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